NFP Survey 2017: Strategy and operational effectiveness

By admin - August 15, 2017

There has been substantial change in the Not-for-Profit (NFP) sector over the past three years and there is at least another two years of change to come. Strategic and operational planning has never been more important.

Access the full NFP Benchmark Survey Report 2017 here

NFPs are sitting on shifting sands of changing funding streams, stakeholder engagement requirements, increasing private and public competition and technological disruptions. Strategic plans are critical roadmaps that set goals, outlay how they will be achieved, and document the collective thoughts of management and the Board.

Despite this environment, there are surprisingly fewer organisations undertaking annual strategic reviews, with those proactively planning dropping from 37% to 32% over the past two years.

A review every three years is still the most common review cycle.

It’s possible that this apparent lack of increased strategic action is a result of the confusing and fast-paced NFP environment, with most organisations aware of the changes going on around them, but there being too much to respond to. 

There are no funding streams to support smaller organisations to satisfy compliance requirements.

There is major identified change occurring in the sector and the compliance burden is certainly not decreasing.

75% of those surveyed feel that the compliance burden is increasing in their organisation. While most organisations (96%) recognise the value that arises from compliance and oversight functions, and respect the importance of presenting a clean bill of health to stakeholders (92%), the findings suggest that one of the ACNC’s key objectives, ‘to promote the reduction of unnecessary regulatory obligations on the Australian NFP sector’, requires further work.

The simple task of proving operational effectiveness creates an additional burden. 67% of respondents report their current reporting obligations exceed their regulatory and funding obligations.

While financial numbers matter, the reporting obligations on NFPs to their stakeholders often goes further, requiring qualitative and quantitative data across differing time periods, stakeholder dissections across demographics and more.

In short, stakeholder reporting is often far more onerous than regulatory requirements. This raises the question of how relevant, reliable or comparable this additional data is, and may support the need for future guidance on the compilation of service level reports.

One noticeable change is an increase in executive level employees among survey respondents. On average, there was an increase by at least one senior executive per organisation to cope with the changes and challenges the sector is facing.

Program reviews 

With about half (46%) of respondents reviewing the design and delivery of their programs annually, this remains the most common approach. We expect to see this figure change in the coming years as NFPs adopt more agile approaches to programs.

What this means for you 

  • Make sure your strategic plans relate to your purpose and are relevant to your stakeholders
  • Strategic plans must be realistic, measureable, trackable and outcome focused
  • Work to have strategic plans owned by the entire organisation not just management
  • Strategic plans start and end with culture and leadership at their core

NFPs undertaking the hardest work for the least reward may start to compete for easier work leaving the most challenging work – to who?

Access the full NFP Benchmark Survey Report 2017 here

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